Subprime loan losses decline in prime securitizations

Fresh data from DBRS shows that subprime loans securitized with mostly prime issuance outperform subprime loans in mostly subprime securitizations, according to the rating agency’s Figures on Automotive Securitization Tapes (FAST) report published last week. An issuer’s ABS transaction is categorized as a prime or subprime shelf based on the weighted-average Fico of each securitized […]

• Bianca Chan
• July 15, 2019
• Capital Markets

Safco Builds Verification Tool to Enable Next-Day Funding

Indirect subprime lender Southern Auto Finance Co. is gearing up to roll out a next-day funding tool that hinges on the ability to verify customer information internally for dealer partners, Chief Executive George Fussell said. With the tool, slated to launch “in the next few months,” Safco aims to verify “stips” — consumer information like […]

• Bianca Chan
• June 12, 2019
• Operations, Strategy, Technology, Update

More Prime Consumers Opt for Used Cars as Subprime Loses Share

As the percentage of prime and super-prime used-car buyers reached an all-time high in the first quarter, the percentage of subprime loan originations fell to a record low, according to Experian’s Q1 2019 State of the Automotive Finance Market Report published today. “The trend of more prime consumers entering the used market is one we’ve […]

• Bianca Chan
• June 6, 2019
• Archives, Credit Performance

Auto ABS Volume Closes In on $60B

Year-to-date auto securitization volume hit $57.8 billion at the end of April, with prime loan issuance accounting for the lion’s share of transactions, according to research released today by Deutsche Bank. Prime loan securitization volume totaled $23.7 billion, and subprime volume reached $12.8 billion. The remaining volume was comprised of retail lease ($9.8 billion), fleet […]

• Marcie Belles
• June 5, 2019
• Capital Markets, Credit Performance

An Explanation of Delinquency Rate Discrepancies Between S&P and the N.Y. Fed

Inclusion of charge-offs when calculating 90-day delinquencies may spell the difference between the 4.47% rate reported by the New York Federal Reserve and the 1.86% subprime rate recorded by S&P Global Ratings at yearend 2018. According to the data dictionary in the N.Y. Fed’s research, delinquency data includes “severely derogatory” accounts, or those with reports […]

• Joey Pizzolato
• April 4, 2019
• Capital Markets, Operations, Update

Delinquency Rates Likely to Temper in Second-Half 2019, Experian Says

The prime and super-prime loans that account for more than 60% of all outstanding auto loans will likely spur a decline in delinquency rates later this year, said Melinda Zabritski, Experian’s senior director of automotive financial solutions. “If the loan is going to go bad, it’ll occur typically around 16 to 18 months in, so […]

• Bianca Chan
• March 5, 2019
• Capital Markets, Credit Performance, Risk

How Frightening Are Subprime Auto Loans?

One of the lasting legacies of the financial crisis is the market’s tendency to take any sign of bad news and frame it in the context of 2008. Collateralized loan obligations, for instance, have been deemed scary because of similarities to the collateralized debt obligations that were riddled with bad mortgages. Now, auto loans are under the microscope. […]

• Bloomberg News
• February 20, 2019
• Capital Markets, Risk

Westlake Financial Aims for Another Year of Growth in 2019

Westlake Financial is shooting for 20% growth in 2019 on the heels of expansion of its direct lending platform and several other units, the lender announced last week. Westlake's portfolio shot up 35% last year, to a record $8.33 billion, with 40.5% of originations in the prime and near-prime credit tiers. Westlake Financial attributed some […]

• Joey Pizzolato
• February 12, 2019
• Earnings, Operations